Article Highlights

  • RBA minutes: Further AUD depreciation both likely and necessary
  • RBA policymakers highlighted weaker trade volumes from Asia
  • RBA also concerned about fall in iron ore prices
  • New Zealand credit card spending up by 6.5% y/y in June
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Aussie pairs hogged the forex spotlight in today’s Asian trading session after the RBA released the minutes of their latest policy meeting. Central bank officials all seemed to share the view that further Aussie depreciation is both likely and necessary since commodity prices have been tumbling. In particular, RBA policymakers expressed concerns about falling iron ore prices and its impact on trading volumes.

AUD/USD popped up to a high of .7384 earlier on and is down 15 pips (-0.21%), AUD/JPY reached an intraday high of 91.80 then slid 12 pips lower (-0.15%), and AUD/NZD is down 58 pips (-0.52%).

The Kiwi got a bit of a boost from positive credit card spending data, as New Zealand reported a 6.5% annualized increase in June. However, this is weaker compared to the previous month’s 7.2% gain, indicating that consumers probably reduced their shopping sprees recently.

NZD/USD is testing the resistance at .6600 and is up 34 pips (+0.52%) while NZD/JPY is trading near the 82.00 handle and is up 46 pips (+0.56%).

Forex traders could pay close attention to franc and pound pairs in the next few hours, as Switzerland is set to release its trade balance while the U.K. will be printing its public sector net borrowing report. The Swiss trade surplus is projected to have narrowed from 3.41 billion CHF to 2.54 billion CHF in June, possibly reflecting a drop in export activity.

Meanwhile, the U.K. could show a smaller public deficit of 8.6 billion GBP compared to the previous 9.4 billion GBP borrowing figure, indicating that the economy is on better financial footing. Keep in mind that data from the U.K. has been pretty impressive these days and that BOE Governor Carney has actually been feeling upbeat about rate hike prospects so another set of good figures could mean more gains for the pound.

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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